Retirement 73) An IRA substitute can build your retirement funds and give you a charitable deduction today. A good choice is the deferred gift annuity. In this arrangement you pay cash to a charity this year and get to deduct part of the payment. The charity invests the cash and promises to pay you an annuity in the future, perhaps when you are 65. The annuity usually is an annual fixed dollar amount for life or a period of years. IRS tables are used to determine the present value of the annuity, and your deduction is the difference between your cash payment and the present value of the annuity. The longer the time between your payment and the annuity starting date, the greater is your current deduction. When you receive annuity payments, part of each payment is a tax free return of your principal and the remainder is taxable income. The rate of return on your annuity is determined at the time of your contribution and varies with your age and the charity you select. Many charities use a Uniform Gift Annuity Rate to determine your return, while others offer a different rate. The usefulness of a gift annuity often depends on the rate of return, so check with several charities before making a decision. (Most established charities offer gift annuities, but you have to ask about them.) Also check the minimum payment; it usually is higher than the IRA maximum of $2,000. Another point: You must make the payment by December 31 to take a deduction this year; you can't wait until April 15 as you can with an IRA. 74) Your business can increase the Social Security benefits your non-working spouse eventually receives. A surviving spouse with lifetime earnings that aren't substantial enough to trigger Social Security payments will receive between 37 1/2% and 50% of the working spouse's retirement payments. But suppose you make your spouse a partner in the business right now. There would be little or no effect on your current federal income taxes, but your spouse as a partner would now have self-employment income. That income would count towards establishing your spouse's independent Social Security retirement payment to supplement yours. This strategy could result in increased self-employment taxes now since both you and the spouse could be liable for the maximum payment. This treatment can be reduced by making the spouse a less than 50% partner and by continuing the partnership only long enough to qualify for the maximum Social Security payout. But you might find that increased self-employment taxes now are worth what might eventually be received in Social Security benefits. 75) You can still borrow now to fund your IRA. The final tax overhaul package allows this. You can either get a personal loan or an advance against your credit card. The money then can be deposited in an IRA, and the deduction can be taken if you qualify for it. In addition, the interest charged is an investment interest expense, which means it is deductible to the extent of your investment income. Interest that you cannot deduct this year is carried into future years until you have enough investment income to offset it. 76) "Paired" retirement plans maximize your benefits. A small business owner can maximize benefits and protect cash flow by pairing two retirement plans. The best approach for a business is to start with a profit sharing plan. This plan does not require annual contributions. So you can make a large contribution to the plan in a good year and make a lower or no contribution in bad years. The maximum contribution is the lower of 15% of salary or $30,000 per employee. When cash flow becomes more predictable or seems to have a floor, you can set up a defined contribution plan. This requires you to make an annual contribution. You set the amount of the annual contribution when you create the plan by stating the percentage of salary that will be contributed per employee. It can range up to 25% of salary or $30,000, whichever is less. Many business owners find the ideal pairing is to set up a defined contribution plan with a contribution rate of about 10% of salary. Then additional contributions of up to 15% of salary can be made to the profit sharing plan. So in the best years 25% of salary will go into the retirement plan. But in bad years the business is obligated to contribute only 10% of salary. You can set a lower figure for the defined contribution plan if you think there might be years when meeting the 10% figure will be tough. By pairing retirement plans you ensure maximum contributions in the good years and allow the business flexibility for years when cash is tight. 77) Smaller businesses can get the benefits of pension plans without the high costs. You are allowed to set up a Simplified Employee Pension Plan. A SEP is simply an IRA account to which the employer makes contributions according to a written formula. The contributions must comply with the nondiscrimination rules. The employee is allowed to make whatever regular IRA contribution he or she would still be eligible for. In addition to relaxed maintenance and reporting requirements, an advantage of a SEP is that the employer does not have to make annual contributions. The contributions are made when the employer chooses, but when made they must be according to a formula that does not improperly discriminate among employees. A disadvantage is that when an employee eventually takes money from the SEP, the distributions do not qualify for the five-year averaging allowed lump sum distributions from regular pension accounts. But this should not be considered a great disadvantage since lump sum benefits generally are rolled over into an IRA, and that puts the benefits on an equal footing with SEP benefits. 78) Some gold and silver investments can be included in IRAs. The 1981 law prohibited IRAs from investing in collectibles and precious metals. But the tax reform plan says that your IRA can purchase the new gold and silver bullion coins minted by the United States. You still cannot put other forms of gold or silver or other collectibles in your IRA. (The GoldPlan in idea #48 can be included in IRAs.) 79) U.S. law requires that assets in pension plans be physically held by a trustee in the United States. For two products -- foreign currency certificates of deposit and Swiss annuities -- a service is available that will let you place these products in your U.S. IRA or pension account. International Financial Consultants of Rockville, Maryland, using the services of the venerable Delaware Charter Guarantee and Trust Company, can provide the required custody and accounting services. Delaware Charter was founded in 1899 and now manages over US$8.5 billion in trust assets, the largest of any non-deposit U.S. trust company. However, they will not offer their services directly, but only through intermediaries. Michael Checkan and Glen Kirsch of International Financial Consultants provide a service in which IFC handles all the year-end currency conversion accounting required by IRS rules, and Delaware Charter compiles the annual reports to the IRS. They are well known in the financial newsletter industry and at one time or another have been recognized as a "recommended vendor" by many of the writers in the newsletter industry. The principals, Michael Checkan and Glen Kirsch have been in the foreign exchange business for a combined total of 50 years. For further information write to International Financial Consultants Inc., Suite 400A, 1700 Rockville Pike, Rockville MD 20852 and ask for information on the offshore retirement account service.